Do I Really Need to Hire a Tax Consultant?

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If you ever start your own part time business, keeping track of your finances is one of the needed keys to a successful business. In addition, learning how to read the tax laws is important as it allows you to keep your hard earned money. However, since the tax laws change frequently, it’s a good idea to hire your own professional tax consultant. It saves you on hassle and if you find a good one, they will do their job better than you ever could. So if you want your business to run smoothly, learn how to find a tax consultant.

First, ask your friends and family if they know someone suited for the job. A tax adviser that someone else knows is more likely to be trustworthy. If not, then it’s time to pick up the phone book and start interviewing everyone. Keep in mind that some people only want your money and aren’t necessary good for your business. Avoid these scammers. If you are interviewing a potential adviser and they demand to be paid for being interviewed, they are a bad fit, drop them fast. Be sure to interview several people before deciding on who to go with. Also, even if you hire someone that sounds good, there is a small chance that it may not work out. If it doesn’t, simply fire them and try again.

You may not need to hire a tax consultant if you are determined to do your own taxes. However, unless you plan to study up on all of the laws, you may make a mistake somewhere. Some people don’t want to get a tax consultant because it costs money, but the resources they save you are worth more than you are paying them. A good tax consultant will be able to save your business money in places that you may not have figured out yourself. Of course, a bad consultant can do the same thing, but they won’t follow the tax laws correctly, leading to trouble down the line. Before you choose a tax specialist, weigh the pros and cons first.

Self Employment Means More Taxes

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Everyone now days wants to make money from home so they can spend more time with their kids. It seems the Internet is on everyone’s mind as the best way to accomplish that and it is indeed probably the best way. However, have you ever considered what it might mean for you tax wise if you are successful in starting your own home business?

Most people who start out to make some extra money online only make small amounts by maybe going to one of the surveys for money websites. They make $50 to $100 or less and then give up. But what if you are one of the ones who does break through and is successful at becoming self employed on the Internet?

The first thing that will happen is that you will have to pay both ends of the Social Security tax. If you are working for a company right now, they pay one half of the SS tax. But once you go out on your own you will be responsible for all 15.3% which is double what you are paying now. And as with all things having to do with the IRS, there is no way around it.

There might be other state taxes that you owe depending where you live. Washington and Ohio have a B&O tax which will take another 1.5% out of your pocket. It might also be a good idea to form an LLC or some other corporate entity for tax reasons and to protect yourself from liability.

All in all, working from home is a great idea that many people would like to be able to accomplish. However, few of them think about all the things that may will happen when you become a sole proprietorship and work for yourself. Like all things in life, there are both good aspects and bad aspects of becoming successful on your own.